House prices up by 1.83% y-o-y in Q2 2019

Russia’s house prices rose by 1.83% during the year to Q2 2019, an improvement from last year’s 0.81% fall and the second highest growth since Q4 2012. During the latest quarter, nationwide house prices fell slightly by 0.41%. Moscow’s prices fell by 1.75% y-o-y in Q2 2019 while they increased 9.16% in St. Petersburg. 

Nationwide house prices have fallen 47% (inflation-adjusted) in the past seven years.

Russia's economy is now improving significantly. 

Russia’s economy grew by 2.3% in 2018, after y-o-y growth of 1.6% in 2017 and 0.3% in 2016 and a contraction of 2.5% in 2015, due to the fall in energy prices and the impact of US and EU sanctions triggered by Moscow’s annexation of Crimea.

Inflation is now stabilizing. In July 2019, consumer prices rose by 4.6% from a year earlier, the slowest pace in seven months but still above the central bank’s target of 4%, according to the Federal State Statistics Service. 

From an exchange rate of RUB 30.231= US$ 1 in January 2013 the ruble fell 63% to RUB 77.175 in January 2016. It rose and fell again so that by July 2019, the average monthly exchange rate was RUB 63.235 = US$ 1.

Rents, rental yields: yields are poor both in Moscow and St Petersburg, at around 3% to 4%

Moscow apartment costs are high, at around €11,866 per sq. m.

Russia: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Moscow $ 1,423,920  $3,820 3.22%
St. Petersburg $ 586,320  $2,129 4.26%

Recent news. The Central Bank of Russia (CBR) cut its key interest rate by 25 basis points to 7.25% in July 2019, following a 25 basis points rate cut in June 2019, amidst slowing inflationary pressures. The key rate peaked at 17% in December 2014. 

The Russian economy is projected to expand by 1.6% this year and by another 1.7% in 2020, according to the IMF.